We are seeing many different areas evolving quickly and simultaneously in India. Of them ecommerce has grown the fastest with several new companies starting operations. The consumer demand for online retail is there for real and growing. We are also seeing many new entrants which are bringing niche and highly differentiated products to the consumer. In 2012, we are likely to see many vertical and niche ecommerce companies grow and achieve scale just like how horizontal ecommerce companies grew last year. However, this time it will not be a winner take all market but several of them will co-exist. Apart from ecommerce we are also seeing several startups which are aggregating the unorganized and fragmented service providers in India. A few years back several companies successfully organized the service providers under the umbrella of listing sites and lead generation platforms. The latest trend is to focus on one specific category of service and deeply integrate with them to enable transactions and not just leads.
Areas Of Opportunity
Internet adoption in India has reached 100 million users. Consumers across India including many in tier II and tier III towns in India are getting online. The rapid growth of smart phones and 3G/4G networks will further accelerate adoption in the country. This will create demand for new products, services and content catering to the needs of Indians. Today, we consume most of our content from global sources because very little “Indian” content exists. We’ve already started seeing some early stage companies trying to build unique educational content for India or serving the entertainment needs of Indians. But it is still very nascent and early, we believe this space is poised to grow and we will see several companies catering to the Indian entertainment, educational and other information needs in the near future. Over the last decade, several sectors like travel, healthcare, financial services have emerged and scaled but they still do not have a wide reach beyond major urban areas and are coping with inefficiencies in the system. Technology can play a role in increasing the access and reducing efficiencies, these sectors could open up many opportunities for entrepreneurs. In most Indian households, the PC is not a “Personal” device but a shared computer. The mobile phone is the real “personal” device. With phones getting smarter and cheaper it will open up huge possibilities of reaching out to the masses and solving many problems in innovative ways. Communication Tools, Education, Entertainment, Financial Services and Travel Services are just a few areas were innovative mobile solutions will emerge.
Advice To Entrepreneurs
This is a great time to be an entrepreneur in India. Entrepreneurs today have access to capital from venture capitalists and angel investors who are willing to put money in early stage ventures, something that hardly existed 10 years ago. Our advice to entrepreneurs would be to focus on the idea and build a core team. Iterate through the ideas and test the market for acceptance and early traction before even deciding to raise any external funding. The early feedback from users helps shape the ideas and give the founders a good understanding of what it will need to scale the product. Once ready with the early data, they should approach VCs who understand their space and can add lot more value in addition to capital.